Is sustainability the right direction for Fairtrade? Ethical trading category report 2023

The Fairtrade Foundation couldn’t have chosen a better time to launch pop-up shop The Endangered Aisle. Its debut in London’s Shoreditch at the end of February coincided with multiple headlines screaming about salad shortages.

The absence of tomatoes, cucumbers and peppers from UK supermarket shelves – partly because of unseasonably bad weather in Morocco and Spain – was the perfect backdrop for the foundation’s message.

That message was of the growing threat of shortages due to climate change. As droughts and floods become more common, the future of staple foods produced overseas is especially under threat, the non-profit warned.

While Fairtrade had not deliberately engineered the campaign to coincide with the shortages, the foundation’s head of responsible business, Anna Mann, admits it was “incredibly well-timed”.

“There was this heightened awareness that we couldn’t buy salads at the time, and our message was that the same could be true for cocoa, coffee and bananas if we don’t invest in producers,” she says.

That message also received high-level backing. Suppliers donated more than 2,000 products to The Endangered Aisle, which sought to illustrate how climate change is threatening the future of the UK’s favourite foods. Retailers including Lidl, Aldi, Tesco and M&S echoed the message in their stores.

“We couldn’t buy salads and the same could have been true for cocoa, coffee and bananas”

So, why has Fairtrade chosen to focus more heavily on climate? And to what extent is this message resonating with consumers?

For the foundation, the decision to talk about climate change was a no-brainer. Salad shortages may have been the first noticeable impact on UK shelves – but many crops grown overseas are already in peril.

Take cocoa. Floods, drought and higher-than-usual temperatures are having a negative impact on harvests. The long-term outlook is even worse.

“By 2050, research shows vast areas of Ghana and Ivory Coast will become unsuitable for cocoa production, affecting the future livelihoods of farmers,” warns Ben Greensmith, UK manager for ethical brand Tony’s Chocolonely.

That’s compounded by the impact of inflation, which has pushed up the overall cost of living by 14% in Ivory Coast. Input costs have shot up even faster. The price of fertiliser has increased by 50% to 60%, says Tony’s. To support farmers, it pays 77% to 82% more than the farmgate price for cacao.

But not everyone is doing the same. And the ramifications of underpayment and under-investment could be huge, warns Sophie Loveday-Davies, marketing director at another ethical chocolate brand, Divine.

“Longer term, if cocoa farming continues to generate low yields and harvests it could lead to the next generation not taking up cocoa farming, which threatens the future of chocolate itself,” she says.

Similar problems are also endangering coffee. Floods and droughts across South America and Africa are causing havoc with harvests. As a result, decreased output and subsequent price hikes are already happening, explains James Wright, founder of Cheerful Buddha.

Price of sustainability

Fairtrade aims to help farmers withstand these challenges through financial and strategic support. Its premiums go towards initiatives such as reforestation projects, climate-friendly farming methods and even disaster recovery funds.

Of course, supporting farmers through all this, on top of a cost of a living crisis, comes at a cost. In March, Fairtrade increased its minimum prices for certified arabica and robusta coffee beans for the first time since 2011, points out Ian Bryson, MD at Lincoln & York Coffee Roasters.

More often than not, this translates to higher prices on shelves. Some brands are attempting to curb the rises. Instant coffee brand TrueStart, for example, has been trying to keep its prices below competing brands. But not everyone can do the same.

Worse still, less ethical brands could undercut prices by paying farmers less. Fairtrade is mindful of the constraints on shopper budgets. But it stresses farmers need consumer support more than ever.

“While affordability and fair pricing is important for people in the UK, it is essential for farmers and agricultural workers overseas,” partnerships director Kerrina Thorogood wrote in The Grocer in February.

“My message is this: shoppers need to choose Fairtrade products when they can, and businesses must continue to invest in equitable, sustainable and ethical supply chains”

Arguably, this cost-conscious environment makes Fairtrade’s latest push even more important. At a time when shoppers need a strong reason to pay more, there is an even greater impetus to highlight sustainability credentials, says Fairtrade’s Mann.

And research suggests Fairtrade could win over shoppers. As many as 66% of Brits are happy to pay more for ethical products, suggests polling from consumer research platform Vypr. Its research also points to a gap in the market for climate messaging. Only 23% of consumers polled thought ethical products had a ‘significant or very significant’ impact on climate change, while 60% said the impact was ‘moderate’.

“This suggests that both brands and retailers have a way to go to educate consumers about the impact choosing ethical products has at all levels of the supply chain,” says Vypr founder Ben Davies.

Shopper education

That education isn’t being done just by Fairtrade. The Rainforest Alliance also talks about climate in its communications. On its site, it says certified farmers implement more sustainable practices that can help adapt to and prepare for climate impacts.

Mondelez’s Cocoa Life similarly talks about sustainability. The scheme works to “protect and restore the land and forests where cocoa is grown, together with the farmers and communities”, it says.

Individual brands are also at it, like Clipper Teas. As a founding Fairtrade brand, it says it’s been talking about sustainability in its marketing for 29 years. “Our products are made with pure, natural ingredients and a clear conscience,” its website boasts.

Then there’s peanut butter brand ManiLife. It has a close relationship with a family-run peanut estate in Argentina and uses cocoa from Kokoa Kamili, a co-op paid above the Fairtrade premium.

“We’ve never led with sustainability claims. I feel conflicted using it as marketing fodder”

“Traceability back to source is very important to us, particularly for our core ingredients like peanuts and cocoa,” says founder Stu Macdonald. However, he has reservations about pushing the brand’s sustainability in promotional messaging. “It’s important to us and it’s probably important to the consumer as well, but I feel conflicted using it as marketing fodder.”

Fairtrade, of course, has no such concerns. And if there is one organisation that can bring trust to sustainability credentials, it’s Fairtrade. That might just be the element that sways shoppers at a time of ever-tightening household budgets.